Supporting businesses to grow
Supporting businesses to grow
The Council is currently managing three European Regional Development Fund (ERDF) business support programmes – and due to its successes, the programmes have been extended to run until June 2023.
To date the programmes have delivered £2.72m in grants to 135 companies with a further 159 companies and 139 potential entrepreneurs receiving business support via workshops, coaching, 1:1 support and mentoring. Three new products have been created and the programme is aiming for a further 26 before the end of the programme, enhancing Coventry’s reputation as one of the top patent-generating cities in the UK. A further 31 companies have been given business coaching specifically covering how to bring innovative products to market. The activity has helped to expand business operations, support entrepreneurs to create new businesses, create jobs, fill vacancies, expand the supply chain, and support the work of the CWLEP Growth Hub. A further 79 businesses have been supported with either an energy audit or business advice to develop new green technologies. The work has also saved 895 tonnes of carbon emissions, helping to create a cleaner, greener, future for Coventry.
Business rates remain constant
Coventry’s business rates rateable value remained constant at £319m in 2019/20. The city’s rateable value has remained relatively constant in recent years. This suggests growth from new properties or those with increased rateable value has been broadly neutralised by those that have been removed from the list or received a reduced rating.
98% of collectable business rates were collected in-year. This meets the target of 98% for the third consecutive year
Recent, pre-COVID growth in the local economy has been sluggish
Gross value added (GVA) is a measure of the increase in the value of the economy due to the production of goods and services by businesses operating in Coventry. In recent history, while Coventry has been a major population centre, business activity has lagged, limiting the prosperity of residents. In the past thirty years, given its size, the city has performed below average according to measures of local economic performance, such as gross value added (GVA). In more recent years, the city has experienced good growth, which has led to increased job opportunities for residents. So GVA gives a high-level summary of the health of the city’s economy in terms of its businesses and is lagged behind other measures of prosperity amongst Coventry residents. This update gives us a measure of growth in 2018, so the picture it gives of the local economy is one of Coventry well before the pandemic hit. Overall this measure indicates that growth in Coventry’s economy overall had started slowing, perhaps meaning that the city is less equipped to be resilient to the significant impact we are likely to see as a result of the pandemic than it might have been otherwise. On the other hand, Coventry’s GVA per head is higher than the average amongst other metropolitan areas so may be better placed to cope than some other places. In 2018 it was provisionally estimated that Coventry’s GVA aggregated to £9.526 billion, an annual growth of 1.5% compared to 3.1% across England overall - so recent growth in Coventry has been relatively sluggish. In 2018 the number of jobs at businesses located in Coventry increased moderately, continuing a recent trend. The total number of businesses did not increase in this time, so there was growth in the number of jobs at existing businesses. The growth in jobs at Coventry workplaces add to the picture showing the local economy growing at a moderate pace.
In recent years labour productivity in Coventry’s firms has been growing (after a period of stagnancy post-recession) and average productivity is now a little higher than the national average and it is notably better than the average amongst similar local authorities. However, it only grew 1.6% in 2018 compared to 2.2% of an average nationally, and this could be a factor behind Coventry’s lower than average GVA growth.
Gross value added
The city is home to some world-class, innovative business clusters. Successful, internationally -significant business sectors in the city and region include advanced manufacturing and engineering; energy and low carbon; connected autonomous vehicles; business, professional & financial services; and digital, creative, and gaming. In 2018, the city is ranked second of 63 city clusters across the UK for the rate of patent applications per population, a sign that the city is innovative.
The evidence presented on the local economy is only available for a period prior to when the Coronavirus pandemic hit and the success of some of these key sectors in Coventry may be challenged or even threatened. There will of course also be threats to other sectors that have been particularly affected across the whole country such as retail and leisure.
GVA per head is a measure used to put the GVA of the city in context given its population size. In 2018 it was £25,972, still notably lower than England overall at 29,356. However, Coventry’s GVA per head is above the average amongst a group of similar areas (all metropolitan local authority areas in England not including London), so overall the local economy is relatively healthy compared to similar places.
However, GVA per head actually reduced very slightly (-0.3%) between 2017 and 2018 (this may be revised upwards next year when more data on 2018 economic activity becomes available), this compares unfavourably to England’s per capita growth of 2.5% and indications are that there has been a reduction in GVA per head for two years now since 2016. This is largely because Coventry’s population has been growing very fast over this time; the value produced by local businesses did not grow as fast as the local population - total GVA grew by 1.5% but Coventry’s population grew by more - Coventry has one of the fastest-growing populations outside of London. The growth in the Coventry population is partly being fuelled by the growth of the local universities - most students are economically inactive.